The estate was constructed as a result of a fire in Shek Kip Mei in 1953, to settle the families of inhabitants in the squats over the hill who lost their homes in one night.

Poor facilities, unsanitary conditions, and the high density of huts represented a serious safety hazard.

Consequently, the Colonial government built a 29-block resettlement estate on the site of the burnt-down shanties to house the homeless victims.

These 7-storey blocks were constructed in an 'H' configuration consisting of two residential wings, with a central core of communal cooking and sanitary facilities.

Residential units, which housed entire families, were roughly 100 square feet (9.3 m2) in size.

In 1961, the subsidised rent policy was launched with the construction of 7 towers at the junction of Tai Hang Road West and Nam Cheong Street.

Housing units were little more than small cubicles, and the original plan was to allocate 24 square feet (2.2 m2) per adult and half that for each child under 12.

Block 41 of the estate, Mei Ho House (美荷樓), the last remaining example of the "Mark II" building in a single-block configuration, has been listed as a Grade I historic building,[8] and will be preserved tentatively as a record of Hong Kong's public housing development.